Monero's consensus algorithm is a form of Proof of Work, but it specifically uses RandomX, which is designed to be efficient on general-purpose CPUs. This design choice helps to prevent the centralization of mining power by specialized hardware, thereby preserving the egalitarian spirit of the network.
Monero uses the RandomX hashing algorithm, which is an instance of Proof of Work optimized for general-purpose CPUs. By using RandomX, Monero ensures a more equitable distribution of block rewards, as it reduces the advantage of ASICs and other specialized mining hardware, promoting decentralization.
One of the main privacy features of Monero is RingCT (Ring Confidential Transactions), which obfuscates transaction amounts. RingCT works by combining multiple inputs and outputs from different transactions, making it difficult to determine the sender and receiver of a transaction. This means that Monero transactions are private by default, and it's impossible to determine the amount of XMR that was sent in a transaction.
In addition to RingCT, Monero uses stealth addresses to further enhance privacy. A stealth address is a one-time address that is generated for each transaction. This means that even if someone were to discover a particular Monero address, they wouldn't be able to track its future transactions. Stealth addresses provide an additional layer of privacy on top of RingCT.
Another key feature of Monero is its Proof-of-Work (PoW) consensus algorithm. PoW allows anyone with a computer to participate in mining and securing the Monero network. This helps to decentralize the network and ensures that no single entity has control over the blockchain.
The history of Monero has been characterized by a focus on privacy and decentralization. In 2016, the Monero community successfully funded the development of Kovri, a privacy-focused router that hides the IP address of users on the Monero network. In 2017, the Monero Research Lab was established to focus on researching and developing new privacy-enhancing technologies for the Monero network.
In 2018, the Monero community implemented a hard fork to update the network and improve its privacy features. The fork included an update to the PoW algorithm, which made it more resistant to ASIC mining. This ensures that mining remains accessible to everyday people, rather than being dominated by large mining farms.
Today, Monero is widely regarded as one of the most private and secure cryptocurrencies on the market. It has gained a reputation as the cryptocurrency of choice for those who value their privacy, and it's often used for anonymous transactions on the dark web.